The glaring media scrutiny that helped derail Rick Perry’s presidential campaign never revealed that the governor’s older sister is a lobbyist embroiled in a national health-care debate. Milla Perry Jones is vice president of government relations at United Surgical Partners International, an Addison, Texas company that runs hospitals and surgery centers co-owned by doctors. Sister Jones works with trade groups to rebut claims that doctor-owned medical facilities inflate American medical bills. Both Governor Perry and his sister have championed doctor-owned facilities in Texas and Washington.

The trade publication “Who’s Who in the Ambulatory Surgery Industry” describes Milla Perry Jones as “a true advocate for the physician-owned healthcare model.” Industry publications say she manages United Surgical’s “state and federal advocacy efforts” and coaches entrepreneurial doctors on how to lobby public officials. The governor’s sister has held leadership positions with the Texas Physician Hospitals Advocacy Center and the Texas Ambulatory Surgery Center Society, both headed by Austin lobbyist Bobby Hillert. Hillert’s ambulatory group “supports physician ownership in all forms” and opposes “any attempts to ban or restrict physician ownership in Texas, in any manner.” Hillert says Milla Perry Jones sat on the PAC committee of his ambulatory group, which endorsed Rick Perry’s 2010 reelection. Milla Perry Jones declined to discuss her work with the Observer, referring all questions to Hillert. “I’m trying to be as helpful as I can,” she said before terminating the call. “I should’ve hung up two minutes ago.”

President Obama and other critics argue that doctors who own stakes in medical facilities drive up health costs because they have a financial interest in ordering excessive procedures. In one of many such studies, a 2006 federal report found that Medicare costs are 20 percent higher at doctor-owned orthopedic surgical hospitals than at competing community hospitals. These studies typically do not determine if the extra procedures are beneficial. The doctor-owned industry says it delivers superior care and points to contradictory research that does not associate doctor ownership with higher costs.

No state has more doctor-owned hospitals than Texas, which claims more than 90 of about 300 such hospitals nationwide. Only California has more doctor-owned ambulatory outpatient facilities, most of which are part owned by physicians. Milla Perry Jones’ company owns interests in 13 U.S. surgical hospitals and 171 surgical centers. United Surgical co-owns its typical facility with both doctors and local non-profit hospitals. The company’s 2010 annual report says that the hospitals provide access to health insurers and doctors. “Our sales and marketing efforts are directed primarily at physicians, who are principally responsible for referring our patients to our facilities,” the report says. Before joining United Surgical in 2004, Milla Perry Jones worked for a foundation supporting Dallas-based Baylor Health Care System, which invests in more United Surgical facilities than any other hospital.

The doctor-owned debate escalated in 2009, when the New Yorker published an article about McAllen by Boston surgeon Atul Gawande. Although McAllen trails the nation in household income, Dr. Gawande noted that its Medicaid patients are almost twice as expensive as the national average. According to government data, Gawande wrote, Medicaid patients upriver in El Paso receive better care at half the cost than they do in McAllen. Gawande argued that McAllen’s medical system “has no brakes,” a failing that he blamed on physicians referring patients to hospitals in which they own interests. Gawande singled out the Doctors Hospital at Renaissance, which wields influence far beyond the Rio Grande Valley.

President Obama gave Gawande’s article to a group of senators in the run up to his signature 2010 health reform. Oregon Senator Ron Wyden told The New York Times that Obama told lawmakers, “This is what we’ve got to fix.” A provision in Obama’s Patient Protection and Affordable Care Act generally bans construction of new doctor-owned hospitals, while barring existing ones from expanding. (President Bush similarly imposed an 18-month moratorium on new specialty hospitals as part of the 2003 Medicare Prescription Drug law).

In 2010, a doctor-owned hospital in Tyler, Texas and a national trade group that Perry’s sister works with filed a lawsuit alleging that Obamacare restrictions on doctor-owned hospitals are an unconstitutional taking of private property. Rejecting this claim, a federal judge appointed by George W. Bush ruled in 2011 that “it is not the function of the Court to determine the wisdom of congressional action.” Three judges on the New Orleans-based U.S. Firth Circuit then threw out the lawsuit on appeal. They ruled in August that the plaintiffs must exhaust their administrative appeals to U.S. Health Secretary Kathleen Sebelius before they go to court.

Unlike Obama, Governor Perry avidly promotes the doctor-owned industry. In 2009 Congress considered restricting doctor-owned hospitals to pay for children’s health insurance. This prompted the governor of the state that leads the nation in doctor-owned hospitals and uninsured people to write Texas’ congressional delegation. Doctor-owned facilities “play a vital role in health care delivery in the state,” Perry wrote, “a role that is rightfully determined by the needs of Texas communities.” Perry spokesman Josh Havens wrote in response to Observer inquiries that the governor “believes that a patient should have options when addressing their health care needs and, respecting free-enterprise, he supports physician-owned hospitals as one of those options.”

If Rick Perry has the back of doctor-owned facilities, they literally have his. Last year Houston surgeon Stanley Jones co-founded Celltex Therapeutics Corp. to perform highly experimental back surgeries. Suffering chronic back pain, the governor volunteered to be that doctor-owned venture’s first guinea pig. Dr. Jones injected stem cells harvested from a gubernatorial thigh into Perry’s blood and spine shortly before the governor formally announced his intent to be president.

For better or worse, doctor-owned facilities are money machines. A 2009 study found that Texas’ doctor-owned hospitals pumped $2.3 billion into the economy each year. The industry has had to use some of this money to fend off political meddling. Heavily favoring Republicans, Perry Jones’ United Surgical PAC spent almost $250,000 on federal politicians from 2005 to 2010, according to the Center for Responsive Politics. The New York Times reported that Doctors Hospital at Renaissance donors gave congressional Democrats $1.3 million in that period, with then-House Speaker Nancy Pelosi visiting that hospital in 2007. Surpassing the powerful Texas Medical Association, the Doctors Hospital’s Border Health PAC spent close to $4 million on Texas state elections from 2005 through 2010, becoming Texas’ 13th largest PAC. Houston’s doctor-owned North Cypress Medical Center pumped another $500,000 into Texas state races, ranking as Governor Perry’s No. 5 donor in 2010.

In one of his last presidential ads, Rick Perry skewered Washington as a twisted place where, “You can’t say that Congressmen becoming lobbyists is a form of political corruption.” United Surgical, North Cypress and Doctors Hospital at Renaissance have paid federal lobbyists—including ex-Congressman Tom Loeffler—almost $3 million since 2005. Joined by two Perry Jones-affiliated trade groups, these same doctor-owned interests paid 24 Texas lobbyists—including U.S. Senator John Cornyn’s daughter—up to $3.4 million in that period. These lobbyists do not include Milla Perry Jones, whose advocacy activities may not trigger Texas’ registration requirements. (A Texas lobbyist generally must register if she receives more than $1,000 a quarter for direct communications with public officials).

Even as they wrestle with spiraling Medicare and Medicaid costs, Governor Perry and Texas lawmakers have embraced the doctor-owned industry. During the first legislative year in which his sister represented the industry, Governor Perry signed a 2005 bill requiring doctors to disclose certain kinds of investment interests to patients. The industry did not openly oppose that disclosure law. That year it was more concerned with killing 11 Texas bills that would have restricted physician ownership. Milla Perry Jones can take a measure of pride. On her eight-year watch, no bill to curtail doctor-owned facilities ever has reached her brother’s desk.

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